The government has answered when taxpayers need to submit payments for the stock repurchase excise tax.
Legislation enacted in 2022 imposed a non-deductible 1% excise tax (the “stock repurchase excise tax”) on the net value of certain share repurchases by publicly traded domestic corporations (or by their subsidiaries) within a tax year, effective with respect to repurchases on or after January 1, 2023. By statute, the stock repurchase excise tax extends to certain U.S. subsidiaries of foreign publicly traded corporation that purchase stock in their foreign parent from unrelated sellers.
The stock repurchase excise tax has been ensconced within the Internal Revenue Code for nearly two years now; diligent taxpayers have been wondering how and when they should report their share repurchases to the IRS, and when they will need to submit payments for the stock repurchase excise tax. The government has now answered this question with the release of final administrative and procedural regulations.
Read a July 2024 report prepared by KPMG LLP: Reporting and paying the stock repurchase excise tax: The time is nigh*
* This report supersedes Maury Passman, Tim Nichols, Taylor Cortright, and Greg Armstrong, KPMG report: Reporting and paying the stock repurchase excise tax – not quite yet (January 18, 2024).